• Tax crime explained

    Tax crime is abusing the tax and super systems for financial benefit. Crimes range from hiding cash wages to avoid tax, using complex offshore secrecy arrangements to falsely claiming refunds and benefits not entitled to.

    There are serious consequences for tax crime. These include penalties, criminal convictions, fines, and even prison sentences.

    Tax crime poses a risk to the community, not just from decreasing revenue available to government, but due to how often it is related to identity crime, money laundering and organised crime. We recognise that tax crime can have a devastating impact on an individual, for example if their identity is stolen. We take all forms of tax crime seriously and we are constantly improving our systems to tackle it.

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    How we protect the revenue

    We have a range of strategies that work together to provide a strong tax and super system that is an unattractive target for tax crime:

    • taking firm action against people who are not doing the right thing and removing the profit from participating in tax crime
    • ‘whole-of-crime’ treatment approaches that drive long-term changes in participation in the tax system by removing the opportunity to repeat an offence
    • systemic solutions that remove the opportunity for people to commit crime and avoid detection.

    We strengthen our systems with advances in technology, law reform and collaboration with a growing network of local and international partners.

    We collect information from a wide range of third-party sources, both public and private, with more than 600 million transactions reported to us annually.

    Our usual data sources include investment income information from banks, financial institutions and investment bodies, employment information and welfare payments. The supply of this data is authorised by law. We match this data with our own information to detect those who may not be correctly disclosing all of their income.

    It is not just organised criminals that need to worry about our scrutiny - every tax evader who thinks their financial activities are invisible to us should think again.

    Our access to data is growing due to local and international partnerships

    We have a multi-agency approach to audits, investigations and prosecutions to address the threat of tax crimes to Australia's financial and regulatory systems. This means that our access to data is increasing every day making it even harder to commit a tax crime.

    We work with other government agencies, Australian law enforcement, industry and overseas counterparts to share data, intelligence and expertise in the fight against tax crime. Some organisations (such as banks, employers, health insurers and other government agencies) have a legal obligation to report your information to us so that it can be used for taxation purposes. This is known as legislated tax collection.

    We also have powers to collect information for data-matching projects designed to address specific industries, issues or risks (such as credit and debit cards, motor vehicles, online selling and share market transactions data matching programs). This is known as 'special purpose acquisition data'.

    In addition, we exchange information with our international treaty partners to ensure correct reporting of income earned overseas by Australian residents and income earned in Australia by foreign residents.

    We also participate in multi-agency task forces involving national and state and territory agencies.

    Transnational transactions are a feature of the global economy. Revenue collection agencies around the world are increasingly sharing intelligence and expertise in financial investigations in the fight against tax evasion and organised crime.

    Technological advances

    Advances in technology allow us to continuously strengthen the security and integrity of our system controls and data. Sophisticated technology, including data modelling, tracking and matching, means we identify illegal behaviour earlier.

    We have a range of analytical models we continually refine to capture new and emerging frauds.

    Data matching is a powerful administrative and law enforcement tool. Information from a variety of third-party sources is compiled electronically, validated, analysed and used for a range of education and compliance activities. Data matching allows us to:

    • pre-fill tax returns, making it easier to everyone to lodge their tax
    • reassure the community we protect honest people and businesses from unfair competition
    • ensure people and businesses:
      • lodge tax returns and activity statements when required to do so
      • correctly declare their income and claim offsets and other benefits
      • comply with their obligations
       
    • detect people and businesses operating outside the tax system, detect fraud against the Commonwealth, and recover debt.

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    Law reform

    We play an active role in advising the government on law reform that will limit opportunities for tax crime. We also work on law reform to increase our capacity for information sharing with other agencies.

    Prosecution and criminal conviction

    People who commit serious tax crime can expect to be referred for prosecution before the courts by the Commonwealth Director of Public Prosecutions (CDPP).

    When someone is found guilty of an offence the courts can impose security bonds, community service orders, fines, additional penalties and, for some offences, prison sentences.

    A criminal conviction can also affect a person's employment and ability to travel outside Australia.

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    Last modified: 25 Jul 2017QC 41316